As most of you know by now, CBS’ resident curmudgeon, Andy Rooney*, died last Friday. One of his classic pieces was on the nasty terms that companies hide in the fine print.

Here then, 17 years before Mouse Print* was born, is a few minutes with Andy Rooney*: [warning: CBS is embedding a commercial ahead of Andy's piece.]

*MOUSE PRINT: *rest in peace.

Thanks to Donna H. for the idea.

NOTE: This is a special edition of Mouse Print* in addition to this week’s regular feature.

All the office superstores have always offered free shipping on orders over $50. Now Staples is breaking ranks and quietly raising that minimum to orders over $75.

*MOUSE PRINT

A spokesperson for the company explained why this happened:

Our primary focus is to serve our small business customers. In the interests of serving our customers with fast delivery and running our business cost effectively, Staples.com changed the minimum order amount for free delivery from $50 to $75 on April 30. We believe this change will have little impact to customers’ overall experience given that the vast majority of our small business customers generally place orders for at least $75.

For what it’s worth, the other two office supply superstores, Office Max and Office Depot, still offer free delivery on orders of $50 or more. The question is, for how long?

There is a high profile move in Michigan to repeal that state’s item pricing law — the law that requires most products sold at retail to have a price sticker affixed to them. The deceptive tactics being used to turn public sentiment again the law is the subject of this Mouse Print* story.

[Note: MrConsumer is the author of the Massachusetts food store item pricing law, and therefore has a personal interest in efforts to water down similar statutes elsewhere.]

It was bad enough from a consumer protection standpoint that the Governor in Michigan came out swinging against the law. A few days later, the retailers’ association there released a headline grabbing “study” claiming that item pricing was costing Michigan shoppers $2.2 billion a year.

In tight economic times, who wouldn’t be against something that costs consumers $2.2 billion, or an average of $562 a year per household?

The trouble is, that $2.2 billion price tag for item pricing is just plain wrong.

*MOUSE PRINT

The missteps in the study are numerous:

The Michigan report used data from a 2001 price survey — a full decade old — that purported to show that prices in New York (an item pricing state) were 8-10% higher than prices in New Jersey (a non-item pricing state). They said the average item was 25 cents more expensive in New York because of item pricing.

How can anyone conclude anything legitimate about Michigan prices based on what prices were in New York 10 years ago?  Michigan retailers did no study whatsoever comparing Michigan prices to those of neighboring states to see if in fact there were any price differences today. And even if they had done a survey and found a difference, who is to say that item pricing would be the cause?

So how did the 2010 Michigan study come up with their claim that item pricing is costing Michigan consumers $2.2 billion a year needlessly? They said that Michigan consumers spend $24.2 annually on groceries and household goods, and since grocery prices were 9% higher in New York, on average, that means that Michigan goods are $2.2 billion more expensive than they should be.

*MOUSE PRINT

Remarkably, the 2010 Michigan study contained data that definitively disproved their own claims.

They say there are two basic cost components of item pricing: the cost of labor to put prices on items, and the cost of the labels and price guns. As to labor, they say a typical supermarket spends 2083 man hours a year item pricing 5 million units of groceries. Let me assume the wage there is $15 an hour. That works out to $31,245 as the labor cost component of item pricing in a typical supermarket. The study also confirms that the labor necessary to do item pricing is the equivalent of one full time worker.

The second cost component of item pricing is the paper price stickers and label guns. They say that stickers and label guns cost $6000-$10,000 per store. I will take the middle number, $8000, and add that to the labor cost. Therefore in total dollars, the initial cost of item pricing based on THEIR REPORT is $39,245 per supermarket per year. Since they say that such a store sells five million units of groceries per year, that works out to a mere $0.008 — 8/10ths of one cent per item as the true cost of item pricing — not the 25 cents per item (9% of total cost of groceries) they claim. Therefore the $2.2 billion claimed cost is wildly exaggerated, has no basis in fact, and serves only to wrongfully fuel public outrage and anti-item pricing sentiment.

Since the actual cost of item pricing BASED ON THE RETAILERS’ OWN FIGURES is only 8/10ths of one cent per item, not 25 cents per item, that works out to only $17.98 a year per household as the real cost of item pricing — less than 35 cents a week — not the $562 per year that they claim.

*MOUSE PRINT

The retailers indicate that costs are higher for them because of item pricing, and most of that cost is in the form of labor costs. However, the report’s own statistics show that Michigan has fewer employees on average per retail store than 39 other states. And the report quotes retailers as saying that “their Michigan staffing levels are the same as those in non-IPL [item pricing] states.”

So, if Michigan retailers do not have more employees because of item pricing, how is it costing consumers there $2.2 billion extra? And, if retailers are to be believed that they will not fire workers, but rather reassign them to other tasks in the store like customer service, where are the savings?

The implied message in the retailers’ argument that item pricing is costing Michigan consumers $2.2 billion extra a year is clear. If you get rid of item pricing, prices will fall to the tune of $562 a year per household ($2.2 billion). If you believe that, I have a bridge in New York to sell you too.

The media in Michigan can also be faulted for blindly reporting the $2.2 billion lie without a critical reading of the study.

My guess is that Michigan consumers will be the big losers in this battle.  Without item pricing, it will be harder to find and compare prices in the store.  Shopping will take more time  if  a consumer has to find a distant self-service aisle scanner to verify prices. And it will be more difficult to catch scanner errors both at the checkout and at home since there will be no price on the item to act as a double check.

Unless you have been asleep for the past month or two, you probably have seen the bright red Toyota commercial touting their commitment to safety:

It says:

“At Toyota, we care about your safety. That’s why we’re investing a million dollars every hour to improve our technology and your safety. It’s an investment that has helped Toyota win multiple top safety pick awards for 2010 by the Insurance Institute for Highway Safety. No other brand has won more. These top safety picks and all our new safety innovations are available at Toyota.com/safety . “

The average TV watcher will likely take away the message that Toyota cares about safety, has won a lot of safety awards, and is spending a million dollars an hour to improve safety.

Mouse Print* asked the company how they arrived at the million dollars an hour figure.

*MOUSE PRINT:

“The $1 million figure represents Toyota’s total global spending on R&D to enhance the safety and technology of its vehicles. [Toyota] projects $760 billion yen [to be spent in FY2011] on R&D. Breaking down the calculations, 90 yen to the dollar equals $8.44 billion, which works out to $2,318,310 per day or $965,962 an hour, rounded to $1 million an hour. In any event, any fluctuations in the yen would impact the exact final figure.”

The key issue is not so much that they rounded up the figure to a million dollars an hour (exaggerating the amount spent by almost $30 million a year) but rather that the number is TOTAL spending on research and development, not just on safety issues. The company could not provide a number for the actual amount just spent on safety, but it certainly is less than the total spent on R&D, and therefore is not $1 million dollars an hour.

When this discrepancy and interpretation of the commercial was pointed out to Toyota, they responded:

“As the commercials mention, the $1 million figure represents Toyota’s R&D spending on new technology and safety, much of it allocated to quality and safety features.”

If you parse the key sentence in the commercial, it does indeed say that they are spending $1 million an hour to “improve our technology AND your safety.” But by using the term “safety” seven times in 30 seconds, and displaying the words “safety” or “safe” on the screen for much of the commercial, listeners are likely to get the net impression that Toyota is spending a million dollars an hour to “improve our technology FOR your safety.” We don’t think the average consumer would take away from the commercial that the company is spending some number less than a million dollars an hour on safety.

In Massachusetts, we have an advertising regulation that provides:

“An advertisement as a whole may be unfair or deceptive although each representation separately construed is literally true.”

Our story on P&G and their promotion promising to give $1 to wildlife causes for every bottle of Dawn sold has been updated, based on new information provided by the company.

See update here, at the end of the original story.